The relationship between reserve-rich national oil companies (NOCs) and technology-savvy international oil companies (IOCs) is one that is constantly evolving.

Instances of this arise often within the pages of E&P (for example, in our August 2011 issue), and the rewards can be staggering. The size and scale of one of the latest deals is particularly impressive and reflects exactly what is possible when two like-minded representatives from each camp put their heads together for their mutual benefit.

The formal signing between Malaysia state oil company Petronas and Shell’s Malaysian subsidiary to undertake two EOR projects offshore Sabah and Sarawak will eventually unlock hundreds of millions of barrels of stranded oil. The contracts build upon two existing production-sharing contracts (PSCs) for fields where oil has been produced for decades using primary and secondary recovery techniques.

On a combined basis, this would be the largest offshore EOR development in the world if it is successful.

The technology to be used on the 13 fields offshore East Malaysia could include the world’s first full field-scale offshore chemical EOR project, according to Shell, with the planned injection of alkaline surfactant polymer (ASP) technology using horizontal wells.

The quest to squeeze more oil out of the ground is neverending, and ASP flooding technology is a tertiary recovery method used for certain reservoirs that is likely to become a growing weapon in the offshore EOR arsenal for NOCs and IOCs alike.

The use of surfactant agents to free oil trapped in the pore spaces of the reservoir and a polymer to increase the area of the reservoir sweep already is in common use onshore. Shell has been testing and refining ASP methods at sites in Russia and Oman, and both companies forecast a projected increase in the average recovery factor from the fields in the Baram Delta and North Sabah from 36% to 50%.

But the task they face in delivering this project is a tough one – the application of chemical EOR offshore is uniquely challenged by remote locations, poor weather, expensive wells, space and weight limitations,

sea water injection source, and limited disposal options. These impact subsurface efficiency, logistics, injection, production, and the environment and are the reasons why chemical EOR has been limited to relatively few pilot tests and partial field projects offshore. This combined project, however, is intended to be a standard bearer for the industry in the transfer of chemical EOR offshore to maximize oil production from existing reservoirs. Total investment over the next 30 years is forecast at US $12 billion. It also is a clear example of how an IOC can add transformative technology, hard-learned know-how, and value to an NOC so that the latter can unlock the value of its stranded resources for the benefit of its citizens. At the same time, it can enable the IOC to gain access to new hydrocarbon resources, often in areas previously inaccessible to them.

With more than 90% of global oil reserves controlled by the NOCs, this is an example that will need to be repeated time and again if the industry is to extract as much oil out of the ground as possible.

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